Should I buy first, or sell first? I don’t know what to do. A commonly asked question without a correct
Many people find themselves in
this classic real estate predicament most associated with “which came first,
the chicken or the egg?” Unfortunately,
there is no right answer that covers the board.
Circumstances, finances, and many other variables play a role in
determining which the best case scenario is for you.
answer.
If you buy first, you may find yourself in the quandary of
owning two homes, paying two mortgages, and having to pay all of the other
expenses that come along with home ownership.
With any luck, your current home will sell quickly, and the problem is
then solved. However, there are no
guarantees that accompany this scenario.
If your house does not sell quickly, you may be forced to close on your
new home, and then you have become the proud owner of 2 homes, that you cannot
afford. If you sell first, a whole
different realm of possibilities opens up.
In this scenario, you sell quickly and luck into finding an ideal home,
and closing on it in a reasonable fashion.
Otherwise, you sell your home, and are stuck with having to put your
belongings in storage, and find yourself shacking up with friends, or
family. Either scenario presents its own
risks and uncertainties. There are too
many conditions involved in determining a correct answer for the “Do I buy
first, or sell first” question.
Generally speaking, there is less pressure, and less risk,
involved in selling your current home first.
Put your house on the market, while at the same time, be out house
hunting. As your house is showing, you
can be compiling a list of potential contenders in a new home. And speaking in financial terms, the majority
of home buyers need the equity, and profit, of their current home in order to
purchase their new home. Many people
need to sell their current home in order to qualify for a loan, leaving them
with no choice, but to sell first. Not
all people, especially in the eyes of the bank, are in a financial position to
carry two mortgages.
While your current home is on the market, you can feel free
to write a contingency offer on any home you find while house hunting. But, bear in mind that you will be paying a premium
with a contingency offer. That is, if the seller even gives it any
thought. Also, you may deem it necessary
to take less for your current home in an effort to get it sold more
quickly. So, be cautious. You can have comfort in knowing that you do
have an opportunity to write a contract if the perfect house arises, but don’t
lose sight of your current home’s value.
Or…do I buy first?
With the economy still on the rebound, and interest rates still low,
many people are entertaining the thought of running out and buying first. The market, like the economy, is also in
recovery mode, meaning home prices are still somewhat lower than they
traditionally would be. The housing
market is moving very quickly because of this, and dictates that homebuyers are
more focused on buying, than on selling.
Motivated buyers are being recommended to obtain a mortgage commitment
that is not contingent upon selling their current home, in order to dive into
this fast-paced buyer’s market.
Homebuyers are realizing that even in a strong market, the selling end
of a transaction can drag on, potentially leaving them in the dust when it
comes to landing a good deal on the purchase of a new home.
Either way, the choice of buying, or selling first, is 100%
circumstantial, and financially dependent on each individual. Circumstances may have you in a position
where you have to sell first in order to obtain the money to buy. Or, they may have you in a position where you
have to buy because of a job relocation.
In today’s market, there are benefits and perks to each
version. Buy first, and plunge into the
hot buyer’s market. Or, sell first, and
have the relief of knowing that you will not be trapped into the potential
payment of two mortgages. For most
people, the stress level is much lower when selling their current home first,
and buying second. Nonetheless, it is a
decision only you can make, given your current circumstances and financial
position. There is no universal right
answer to “Should I buy, or sell first”?
Real Estate Sales and Property Management
Managing Principal Broker/Owner
Realty Solutions
www.allaboutportland.com
www.jessicashope.com
Gabby Tyer is your ultimate real estate resource for Portland, Oregon and surrounding areas. Visit my website for detailed information regarding today’s real estate markets.
Portland Real Estate market stats news and education. Complete search access to all homes for sale in Portland, Oregon and surrounding areas.
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